What happens to my Lifetime ISA if I die?
If you die, the money and investments you hold in your Lifetime ISA will be passed on to your beneficiaries. After your death, your Lifetime ISA will retain its tax benefits, but only until:
- The administration of your estate is completed; or
- The Lifetime ISA is closed by your beneficiary
If neither of these two things occurs within three years from your date of death, the Lifetime ISA will be closed.
The government withdrawal charge of 20% (25% from 6 April 2021) doesn't apply after death, meaning your beneficiaries can inherit its full value – though this will be subject to inheritance tax.
It's important to remember that tax rules can change in the future, and that how you’re taxed depends on your personal circumstances.